Risk management system for a global airline company - Case Study

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The system for this airline was designed to automate the processes associated with assessing the compounded impact of financial risks on the company's financial results, modeling and maintenance of payment schedules for operational and financial leasing.

The primary targets for this system include:

modeling of risk forecasting and the budget line
accounting and maintenance of payment schedules for operating and financial leasing
reporting risk assessments and leasing payments

The architecture of the system was implemented by using a three-step approach:

backend — Java
frontend — JS
modeling — R

The database management system being used is Oracle.

The duty cycle in the system includes the following steps:

data import from external systems
simulation and scenario development
regular reporting

As a base of data input becomes market data in real-time, it is downloaded from the Bloomberg and Platts systems. These include:

exchange rates (US Dollar, Euro)
cost of Brent oil
LIBOR rates of 3М and 6М
forward rates (US Dollar, Euro)
cost of Platts oil

Then the system carries out modeling and forecasting that is based on historical data that was downloaded. The system uses three types of factors calculation:

formula calculation
deterministic methods
stochastic models

The Stochastic version of the calculation uses Monte Carlo simulations with Cholesky factorization.

The results of collecting statistical information are tested by expanding the Dickey-Fuller test.

Forecasts are based on the data obtained. The system has the ability to build a long-term forecast of monetary flows for operational and financial leasing based on the budget scenario.

All reports provide information about factors, objects, and financial results indicators. Comprehensive reports are founded on data obtained from the simulation results.

There is also an opportunity to generate a report based on probabilistic statistics, representing sets of percentiles for each factor.

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Client References

I want to express my gratitude for all of your team’s hard work, support and extra help. We are very grateful for all that you have done for us.
Senior Project Manager, a U.S. specialty digital design and web development agency

Your quality of work is exceptional, and your flexible approach has allowed us to build and deploy a large amount of complex functionality in a very short space of time. Kudos to everyone for their professionalism and for delivering results that exceeded our expectations.
CEO, leading social media analytics provider

We have never had a better release that we can think of. And that is all because of your hard and dedicated work. So here is a big THANK YOU to everyone from all of us!
Editor, leading Scandinavian newspaper

For a software vendor like ourselves, picking the right development partner is crucial. First Line’s technical expertise and solid project management, coupled with their proficiency in Agile methodologies, have made them an integral part of our product development group.
VP Product Development, leading enterprise software vendor

Our First Line Team has been doing a great job. All of the guys check in great code, and they have a forward thinking mindset, not a feature-to-feature approach. They are also very open in terms of sharing knowledge, which is critical to running productive distributed teams.
Application Development Director, global marketing company

We've all learned a lot from you, and it is great working with you.
Application Development Director, global marketing company

The First Line team has an excellent process and we can learn from your team and improve.
Product Owner, Strategic Software Consultancy

I would like to thank the First Line development team for their dedication and high level of quality in their work. Despite being thousands of miles apart, we have been able to work quickly, effectively, and intelligently. Your team has been a major part of why we have been successful thus far.
VP Engineering, e-learning startup

First Line is a great technology partner capable of delivering complex, ‘industrial grade’ projects. They have demonstrated strong technical competence and solid understanding of the media and publishing domain. We have also been very impressed by the management team's attention to our needs and commitment to our success.
CEO, leading European digital media company

Your effort is the #1 reason that this project is going so well. I've worked with a lot of teams over the years and there are very few teams that I trust and respect. When you are given a task or feature, I never have to worry whether or not it will be accomplished on time and I never worry about the quality - you always deliver.
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The First Line Software team is professional, results driven, and proactive. I know that when we provide requirements for new functionality, they will not only deliver on the scope of what has been asked but will look beyond and give insight into how we can make our product even better. It has been a privilege to work with First Line Software, and I look forward to continuing our partnership in future.
VP, global marketing company

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